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SOI 2021: PPE’s Future Up for Debate

PPE’s stranglehold on the industry has loosened considerably. But are its days numbered?

In an effort to keep his team employed last year, Bert Williams of Tucson, AZ-based Williams & Associates (asi/360450) followed the crowded path of selling personal protective equipment (PPE).

His company received 30,000 masks in spring 2020 and sold out of them in four days. Next, he ordered 100,000 masks and sold them all in a week. Placing signs outside the office promoting his company as the city’s PPE headquarters, he couldn’t stock up fast enough to meet the never-ending demand.

A year later, that demand has finally fizzled out.

“PPE sales have dropped off to about 20%-25% of what they were during the peak,” Williams says. “We have clients who we’ve taken care of since the beginning of the pandemic, but profits dropped as inventories and availability increased. Overall, PPE sales will probably account for only about 7%-8% of our total sales in 2021.”

Blank Out

Distributors started the pandemic sourcing blank PPE, but the tide shifted toward decorated PPE by the end of the year. The largest distributors, with revenue of $5 million and above, were more heavily reliant on blank PPE (45%).

Percentage of PPE Sold Decorated vs. Blank

Indeed, 2020 was the year of PPE. Masks and hand sanitizer were the two most popular product searches on ESP. (Masks had more than double the number of searches of writing instruments, the next closest traditional promo item.) According to Counselor State of the Industry data, PPE accounted for 25.6% of all industry sales last year – a total of $5.3 billion.

Right now, as mass vaccination spreads and government restrictions loosen throughout the United States, the promo industry is experiencing a sense of normalcy. Subsequently, distributors have made a concerted return to traditional promotional products in lieu of PPE. By June, masks were no longer one of the 10 most popular searches on ESP. Thermometers, bandannas, touchless openers, antibacterial products and face shields – all top 100 searches in ESP in 2020 – had fallen off the top 100 list in Q1.

Greg Gregorian “PPE is definitely here to stay. Maybe not the masks, but hand sanitizer for sure. People will be more aware of cleanliness going forward.” Greg Gregorian, Lunar Branding (asi/257241)

“The last big orders of sanitizer and masks we received were in January,” says Joy Pulitzer, owner of Lafayette, CO-based Pulitzer Promotions (asi/302465). “We’ve seen a few scant orders since.”

After last year’s mad dash to procure as much PPE as possible, many distributors are now left with a stockpile of masks, sanitizer and neck gaiters collecting dust in their homes and offices. For example, Williams had a loyal client who indicated that they needed 250,000 disposable masks. After Williams added to his inventory, the client backed out. “We’ve been selling down the inventory, but would sell at a loss just to get rid of the masks,” Williams says.

Selling Protection

Even in the great PPE rush last year, roughly four in 10 suppliers did not offer PPE of any kind.

Percentage of Suppliers Selling PPE in 2020

Sanitizer demand has fallen so much that suppliers and distributors across the country are prepared to give it away. To unload its surplus, Akron, OH-based Consolidus (asi/166966) has launched akronsafe.com, a website for local businesses to receive free sanitizer. As of mid-May, about 60 companies have signed up, expressing their relief and appreciation for the assistance. Jeffrey Jones, founder and CEO of Consolidus, anticipates giving away roughly 50% of existing inventory – approximately 20,000 units of 2-oz. bottles of USA-made sanitizer.

To be clear, there are some distributors who are continuing to see PPE business. At Consolidus, even as sales of PPE have lessened in 2021 (25% of total company revenue compared to 39% in 2020), the distributor anticipates continued inquiries. “We continue to see a demand for PPE and expect that to continue even as we transition through the pandemic, due to the nature of some of our markets, specifically healthcare and event organizers,” says Jones.

More Than Masks

Small, medium and large distributors alike sold masks in relatively equal proportions to their business. But with other PPE items, the large companies were more actively sourcing and selling.

Percentage of Products Sold

Two Proforma owners agree that the demand for PPE is still strong.

Matt Del Valle, owner and president of Independence, OH-based Stan Miller & Associates Powered by Proforma (asi/300094), and Cynthia Bruce, owner of Proforma CSI in Siesta Key, FL, say their clients continue to order face masks, nitrile gloves, hand sanitizer and other preventive items. That’s why they launched Proforma MED, a full-scale medical supply division within the Top 40 distributorship, in February.

“What we’re seeing is that a lot of government agencies and medical facilities don’t want to be caught unprepared again, so they’re procuring equipment for future use,” Del Valle says.

Partnering with global leaders in the medical technology space, Proforma MED is currently working with a vendor that has a cost-effective solution for hand sanitizer, which Del Valle expects to explode in popularity over the next year. “We expect exponential growth,” Bruce says. “We see an ongoing need for medical supplies. Preventive care is extremely important right now and will be going forward.”

If there’s anything regarding a consensus about PPE, it’s this: Although the volume of orders may have decreased, it appears that some forms of PPE have carved out a permanent niche in the industry. “PPE is definitely here to stay,” says Greg Gregorian, founder and CEO of North Chelmsford, MA-based Lunar Branding (asi/257241). “Maybe not the masks, but hand sanitizer for sure. People will be more aware of cleanliness going forward.”